CenturyLink Reports Strong Second Quarter 2014 Results

            CenturyLink Reports Strong Second Quarter 2014 Results

Achieved operating revenues of $4.54 billion, including core revenues[1] of
$4.10 billion

Generated operating cash flow[2] of $1.81 billion, excluding special items

Generated free cash flow[2] of $677 million, excluding special items and
integration-related capital expenditures

Achieved Adjusted Net Income[2] of $408 million and Adjusted Diluted EPS[2] of
$0.72, excluding special items

Completed $2 billion 2013 share repurchase program; Repurchased 59.5 million
shares since inception of program in February 2013, representing 9.6% of
outstanding shares as of December 31, 2012

Commenced follow-on $1 billion share repurchase program in second quarter

PR Newswire

MONROE, La., Aug. 6, 2014

MONROE, La., Aug. 6, 2014 /PRNewswire/ --CenturyLink, Inc. (NYSE: CTL) today
reported strong operating revenues, operating cash flow and free cash flow for
second quarter 2014.

CenturyLink logo.

"CenturyLink second quarter results reflect strong demand for our
high-bandwidth data services and cloud and hosting solutions, solid consumer
demand for Prism TV service and our continued mitigation of legacy revenue
declines," said Glen F. Post III, chief executive officer and president.
"Total operating revenues increased slightly year-over-year and exceeded our
revenue guidance for the quarter. Cash flows for the quarter were also strong,
primarily due to solid revenue performance and continued focus by our
employees on containing costs.

"Our reliable, secure solutions that meet both network and hosting needs
remain a strong driver of increasing demand from business customers. We
continue to experience success with our managed service solutions, as well as
multi-site MPLS[3] sales. Our development of advanced cloud infrastructure
technology significantly strengthens our capabilities to meet the growing
demand for highly automated cloud and managed services, and we have further
expanded our hosting footprint with the opening of the new Minneapolis – St
Paul data center. Additionally, the expansion of symmetrical 1 gigabit service
to 16 cities, announced yesterday, will enhance our capability to provide
higher broadband speeds and an enhanced service experience to both residential
and business customers.

"Overall, we are pleased with our second quarter results, which reflect our
continued progress toward revenue stability. We had a strong funnel of sales
opportunities entering the third quarter and we are looking forward to
continuing to execute on our strategic priorities to create value for
shareholders,"Post concluded.

Second Quarter 2014 Highlights

  oAchieved core revenues of $4.10 billion in second quarter, a 0.2%
    year-over-year decline, compared with a 1.6% year-over-year decline in
    second quarter 2013; Strategic revenues[4] grew 5.1% from the second
    quarter a year-ago.
  oGenerated free cash flow of $677 million, excluding special items and
    integration-related capital expenditures.
  oExperienced continued strength in sales of high bandwidth data services to
    business customers.
  oAdded nearly 16,000 CenturyLink^® Prism^TM TV customers during second
    quarter, ending the period with approximately 215,000 customers in
    service.
  oEnded the quarter with more than 6 million high-speed Internet customers,
    a decrease of approximately 2,100 in second quarter 2014 due to typical
    seasonality.
  oPurchased and retired an additional 4.5 million shares of CenturyLink
    common stock for $160 million during second quarter 2014, of which 1.2
    million shares were under the $1 billion follow-on program.

Consolidated Financial Results

Operating revenues for second quarter 2014 increased to $4.54 billion from
$4.53 billion in second quarter 2013 driven by higher strategic and data
integration revenues. The increase in strategic revenues was primarily due to
increased business customer demand for high-bandwidth data services and
hosting solutions, along with the year-over-year growth in high-speed Internet
and CenturyLink^® Prism^TM TV customers. This increase was partially offset by
lower legacy services revenues, primarily due to the impact of access line
losses and lower access revenues.

Operating expenses, excluding special items, increased to $3.82 billion from
$3.79 billion in second quarter 2013. The year-over-year increase was
primarily driven by higher customer premise equipment (CPE) sales costs,
expenses related to the growth of Prism^TM TV and a higher Universal Service
Fund (USF) contribution factor, which were partially offset by lower
depreciation and amortization expenses.

Operating cash flow (as defined in our attached supplemental schedules),
excluding special items, decreased to $1.81 billion from $1.86 billion in
second quarter 2013. For second quarter 2014, CenturyLink achieved an
operating cash flow margin, excluding special items, of 39.9% versus 41.1% in
second quarter 2013. These decreases were primarily driven by the result of
lower legacy revenues and the expense increases described above.

Adjusted Net Income and Adjusted Diluted Earnings Per Share (Adjusted Diluted
EPS)

Adjusted Net Income and Adjusted Diluted EPS exclude the after-tax impact of
special items, the non-cash after-tax impact of the amortization of intangible
assets related to acquisitions since mid-2009, and the non-cash after-tax
impact to interest expense of the assignment of fair value to the outstanding
debt assumed in connection with those acquisitions.

Excluding the items outlined above, CenturyLink's Adjusted Net Income for
second quarter 2014 was $408 million compared to Adjusted Net Income of $417
million in second quarter 2013. Second quarter 2014 Adjusted Diluted EPS was
$0.72 compared to $0.69 in the year-ago period. See the attached schedules for
additional information.

GAAP Results

Under generally accepted accounting principles (GAAP), net income for second
quarter 2014 was $193 million compared to $269 million for second quarter
2013, and diluted earnings per share for second quarter 2014 was $0.34
compared to $0.44 for second quarter 2013.

Details regarding the Company's special items for the three months ended June
30, 2014 and 2013 are provided in the accompanying financial schedules.

Segment Financial Results[5]

Consumer

The Consumer segment achieved year-over-year revenue growth driven by
increased high-speed Internet and CenturyLink^® Prism^TM TV customers and
price increases on certain products.

  oStrategic revenues were $709 million in the quarter, an 8.6% increase over
    second quarter 2013.
  oGenerated $1.50 billion in total revenues, slightly higher than second
    quarter 2013, reflecting strong growth in strategic services partially
    offset by the continued decline in legacy services.
  oAdded nearly 16,000 CenturyLink^® Prism^TM TV customers during second
    quarter 2014, increasing penetration of the more than 2.1 million
    addressable homes to approximately 10%.

Business

The Business segment achieved its fourth consecutive quarter of year-over-year
core revenue growth driven by continued demand for high-bandwidth data
services and solid sales momentum.

  oStrategic revenues were $663 million in the quarter, a 7.8% increase over
    second quarter 2013, driven by strength in high-bandwidth offerings such
    as MPLS and Ethernet services.
  oGenerated $1.56 billion in total revenues, an increase of 2.6% from second
    quarter 2013, as growth in high-bandwidth offerings and data integration
    revenues offset lower legacy services revenues. Data integration revenues
    were $20 million higher in second quarter 2014 compared to second quarter
    2013.
  oAchieved segment margin of 37.9%, which declined from 40.2% a year-ago.
    This decrease was primarily due to higher costs related to business
    revenue growth such as CPE, facility and sales and marketing, along with
    the decline in legacy revenues.
  oContinued strong sales momentum in second quarter with solid sales funnel
    entering third quarter and continued success in sales of Managed Office
    and Managed Enterprise solutions.

Wholesale

The Wholesale segment ended the quarter with more than 19,700 fiber-connected
towers, an increase of 18% from second quarter 2013.

  oStrategic revenues were $568 million in the quarter, down slightly from
    second quarter 2013, as increases in wireless carrier bandwidth demand and
    Ethernet sales were offset by declines in low-speed data revenue.
  oGenerated $866 million in total revenues, a decrease of 4.8% from second
    quarter 2013, reflecting the continued decline in low-speed data revenues
    and in legacy revenues, primarily driven by lower long distance and
    switched access minutes of use, along with access rate reductions from
    implementation of the CAF Order[6].
  oCompleted approximately 500 fiber builds in second quarter 2014; lowered
    the annual estimate for fiber builds to between 2,000 to 2,500 for
    full-year 2014 due to continued customer decisions to defer certain sites
    into 2015.

Hosting

The Hosting segment grew managed hosting (including cloud) and colocation
revenues as cross-selling initiatives continue to strengthen sales
opportunities.

  oOperating revenues were $358 million in the quarter, a 3.2% increase from
    second quarter 2013.
  oManaged hosting revenues[7] were $148 million, representing a 9.6%
    increase from second quarter 2013, and colocation[7] revenues were $158
    million, a 1.9% increase over the same period a year ago.
  oExpenses increased $10 million from second quarter 2013 primarily due to
    higher employee costs.
  oOpened a data center in Minneapolis, Minnesota offering colocation, cloud
    and managed hosting services connected to CenturyLink's IP backbone and
    global data center footprint.

Guidance – Third Quarter 2014

The Company expects third quarter 2014 revenues and operating cash flow to
decrease compared to second quarter 2014 primarily due to the continued
decline of legacy revenues and increased operating expenses related to the
normal seasonality of outside plant maintenance and utility costs.

Third Quarter 2014 (excl. special items)
Operating Revenues   $4.47 to $4.52 billion
Core Revenues        $4.06 to $4.11 billion
Operating Cash Flow  $1.72 to $1.77 billion
Adjusted Diluted EPS $0.58 to $0.63

All 2014 guidance figures and 2014 outlook statements included in this release
(i) speak as of August 6, 2014 only, (ii) exclude the impact of any share
repurchases made after June 30, 2014 and (iii) exclude the effects of special
items, future changes in regulation or accounting rules, integration expenses
associated with our recent acquisitions, any changes in operating or capital
plans or other unforeseen events or circumstances that impact our financial
performance, and any future mergers, acquisitions, divestitures or other
similar business transactions. See "Forward Looking Statements" below. For
additional information on how we define certain of the terms used above, see
the attached schedules.

Investor Call

As previously announced, CenturyLink's management will host a conference call
at 4:00 p.m. Central Time today, August 6, 2014. Interested parties can access
the call by dialing 866-835-8905. The call will be accessible for replay
through August 14, 2014, by dialing 888-266-2081 and entering the access code
1640411. Investors can also listen to CenturyLink's earnings conference call
and webcast replay by accessing the Investor Relations portion of the
Company's website at www.centurylink.com through August 28, 2014. Financial,
statistical and other information related to the call will also be posted to
our website.

Reconciliation to GAAP

This release includes certain non-GAAP financial measures, including but not
limited to operating cash flow, free cash flow, core revenues, Adjusted Net
Income and adjustments to GAAP measures to exclude the effect of special
items. In addition to providing key metrics for management to evaluate the
Company's performance, we believe these measurements assist investors in their
understanding of period-to-period operating performance and in identifying
historical and prospective trends. Reconciliations of non-GAAP financial
measures to the most comparable GAAP measures are included in the attached
financial schedules. Reconciliation of additional non-GAAP financial measures
that may be discussed during the earnings call described above will be
available in the Investor Relations portion of the Company's website at
www.centurylink.com. Investors are urged to consider these non-GAAP measures
in addition to, and not in substitution for, measures prepared in accordance
with GAAP.

About CenturyLink

CenturyLink is the third largest telecommunications company in the United
States and is recognized as a leader in the network services market by
technology industry analyst firms. The Company is a global leader in cloud
infrastructure and hosted IT solutions for enterprise customers. CenturyLink
provides data, voice and managed services in local, national and select
international markets through its high-quality advanced fiber optic network
and multiple data centers for businesses and consumers. The company also
offers advanced entertainment services under the CenturyLink^® Prism^TM TV and
DIRECTV brands. Headquartered in Monroe, La., CenturyLink is an S&P 500
company and is included among the Fortune 500 list of America's largest
corporations. For more information, visit www.centurylink.com.

Forward Looking Statements

Certain non-historical statements made in this release and future oral or
written statements or press releases by us or our management are intended to
be forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on
current expectations only, and are subject to a number of assumptions, risks
and uncertainties, many of which are beyond our control. Actual events and
results may differ materially from those anticipated, estimated, projected or
implied by us if one or more of these risks or uncertainties materialize, or
if our underlying assumptions prove incorrect. Factors that could affect
actual results include but are not limited to: the timing, success and overall
effects of competition from a wide variety of competitive providers; the risks
inherent in rapid technological change, including product displacement; the
effects of ongoing changes in the regulation of the communications industry,
including the outcome of regulatory or judicial proceedings relating to
intercarrier compensation, access charges, universal service, broadband
deployment, data protection and net neutrality; our ability to effectively
adjust to changes in the communications industry, and changes in our markets,
product mix and network caused by our recent acquisitions; our ability to
successfully integrate recently-acquired operations into our incumbent
operations, including the possibility that the anticipated benefits from our
recent acquisitions cannot be fully realized in a timely manner or at all; our
ability to effectively manage our expansion opportunities, including retaining
and hiring key personnel; possible changes in the demand for, or pricing of,
our products and services, including our ability to effectively respond to
increased demand for high-speed broadband service; our ability to successfully
introduce new product or service offerings on a timely and cost-effective
basis; the adverse impact on our business and network from possible equipment
failures, security breaches or similar attacks on our network; our ability to
successfully negotiate collective bargaining agreements on reasonable terms
without work stoppages; our ability to use net operating loss carryovers of
Qwest in projected amounts; our continued access to credit markets on
favorable terms; our ability to collect our receivables from financially
troubled communications companies; our ability to maintain favorable relations
with our key business partners, suppliers, vendors, landlords and financial
institutions; any adverse developments in legal or regulatory proceedings
involving us; changes in our operating plans, corporate strategies, dividend
payment plans or other capital allocation plans, including those caused by
changes in our cash requirements, capital expenditure needs, debt obligations,
pension funding requirements, cash flows, or financial position, or other
similar changes; the effects of adverse weather; other risks referenced from
time to time in our filings with the SEC; and the effects of more general
factors such as changes in interest rates, in tax laws, in accounting policies
or practices, in operating, medical, pension or administrative costs, in
general market, labor or economic conditions, or in legislation, regulation or
public policy. These and other uncertainties related to our business and our
recent acquisitions are described in greater detail in Item 1A of our Form
10-Q for the quarter ended March 31, 2014, as updated and supplemented by our
subsequent SEC reports. You should be aware that new factors may emerge from
time to time and it is not possible for us to identify all such factors nor
can we predict the impact of each such factor on the business or the extent to
which any one or more factors may cause actual results to differ from those
reflected in any forward-looking statements. You are further cautioned not to
place undue reliance on these forward-looking statements, which are inherently
speculative and speak only as of the date made. We undertake no obligation to
update any of our forward-looking statements for any reason.

[1] Core revenues defined as Strategic revenues plus Legacy revenues (excludes
Data Integration and Other revenues), as described further in the attached
schedules

[2] See attachments for non-GAAP reconciliations

[3] Multi-protocol Label Switching

[4] All references to Strategic and Legacy revenues herein reflect certain
adjustments described in the attached schedules

[5] All references to segment data herein reflect certain adjustments
described in the attached schedules

[6] Federal Communications Commission's Connect America and Intercarrier
Compensation Reform Order (the CAF Order) adopted on October 27, 2011

[7] Hosting revenue by product category was restated in 1Q14 to allocate
cross-connect revenue with the associated colocation or managed service





CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)
                   Three months ended June 30, 2014                  Three months ended June 30, 2013
                                                    As adjusted                                     As adjusted                             Increase

                                 Less               excludingspecial  As        Less               excluding          Increase(decrease)  (decrease)
                   Asreported  specialitems     items              reported  specialitems                        as reported         excluding
                                                                                                     special                                special
                                                    (Non-GAAP)                                      items(Non-GAAP)
                                                                                                                                             items
OPERATING
REVENUES*
 Strategic     $ 2,298                            2,298              2,186                         2,186              5.1%                 5.1%
 Legacy          1,803                            1,803              1,923                         1,923              (6.2%)               (6.2%)
 Data             187                              187                167                           167                12.0%                12.0%
 integration
 Other           253                              253                249                           249                1.6%                 1.6%
                   4,541         -                  4,541              4,525      -                  4,525              0.4%                 0.4%
OPERATING
EXPENSES
 Cost of
 services and      1,962         6              (1) 1,956              1,873      4              (4) 1,869              4.8%                 4.7%
 products
 Selling,
 general and       831           59             (1) 772                814        16             (4) 798                2.1%                 (3.3%)
 administrative
 Depreciation
 and               1,093                            1,093              1,123                         1,123              (2.7%)               (2.7%)
 amortization
                   3,886         65                 3,821              3,810      20                 3,790              2.0%                 0.8%
OPERATING         655           (65)               720                715        (20)               735                (8.4%)               (2.0%)
INCOME
OTHER INCOME
(EXPENSE)
 Interest         (325)                            (325)              (325)                         (325)              0.0%                 0.0%
 expense
 Other
 (expense)         (7)           (14)           (2) 7                  4          -                  4                  (275.0%)             75.0%
 income
 Income tax       (130)         25             (3) (155)              (125)      40             (5) (165)              4.0%                 (6.1%)
 expense
NET INCOME     $ 193           (54)               247                269        20                 249                (28.3%)              (0.8%)
BASIC EARNINGS  $ 0.34          (0.10)             0.43               0.45       0.03               0.41               (24.4%)              4.9%
PER SHARE
DILUTED
EARNINGS PER     $ 0.34          (0.09)             0.43               0.44       0.03               0.41               (22.7%)              4.9%
SHARE
AVERAGE SHARES
OUTSTANDING
 Basic           567,915                          567,915            604,302                       604,302            (6.0%)               (6.0%)
 Diluted         569,032                          569,032            605,602                       605,602            (6.0%)               (6.0%)
DIVIDENDS PER    $ 0.540                            0.540              0.540                         0.540              0.0%                 0.0%
COMMON SHARE

SPECIAL ITEMS
          Includes severance costs associated with recent headcount reductions
(1) -    ($33 million), integration and retention costs associated with our
          acquisition of Qwest ($14 million) and the impairment of two office
          buildings ($18 million).
(2) -    Impairment of a non-operating investment ($14 million).
(3) -    Income tax benefit of Item (1).
          Includes severance costs associated with reduction in force
          initiatives ($4 million), integration, severance and retention
(4) -    costs associated with our acquisition of Qwest ($11 million),
          integration, severance, and retention costs associated with our
          acquisition of Savvis ($4 million) and an accounting adjustment ($1
          million).
(5) -    Income tax benefit of Item (4) and a favorable federal income tax
          settlement ($33 million).

* During 2013, we reallocated the discounts on our bundled services (local,
long distance, and broadband) to the component products and services. The net
effect of the bundled services reallocation was a reclassification of certain
revenues from legacy services to strategic services. Also in 2013, we
reallocated our CLEC revenues into their component products and services.
The net effect of this CLEC reallocation was a reclassification of certain
revenues from strategic services to legacy services. The 2013 information
presented here has been restated to reflect these reclassifications.



CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)
                   Six months ended June 30, 2014              Six months ended June 30, 2013
                                                    As
                                                    adjusted
                                                                                                As adjusted
                   Asreported  Less               excluding    Asreported  Lessspecial                        Increase(decrease)as  Increase(decrease)excluding
                                 specialitems     special                    items           excluding special  reported              specialitems
                                                    items                                       items(Non-GAAP)

                                                    (Non-GAAP)
OPERATING
REVENUES*
 Strategic     $ 4,579                            4,579        4,350                          4,350              5.3%                   5.3%
 Legacy          3,632                            3,632        3,875                          3,875              (6.3%)                 (6.3%)
 Data             361                              361          307                            307                17.6%                  17.6%
 integration
 Other           507                              507          506                            506                0.2%                   0.2%
                   9,079         -                  9,079        9,038         -                9,038              0.5%                   0.5%
OPERATING
EXPENSES
 Cost of
 services and      3,897         10             (1) 3,887        3,669         6            (4) 3,663              6.2%                   6.1%
 products
 Selling,
 general and       1,674         83             (1) 1,591        1,632         48           (4) 1,584              2.6%                   0.4%
 administrative
 Depreciation
 and               2,200                            2,200        2,240                          2,240              (1.8%)                 (1.8%)
 amortization
                   7,771         93                 7,678        7,541         54               7,487              3.0%                   2.6%
OPERATING         1,308         (93)               1,401        1,497         (54)             1,551              (12.6%)                (9.7%)
INCOME
OTHER INCOME
(EXPENSE)
 Interest         (656)                            (656)        (641)                          (641)              2.3%                   2.3%
 expense
 Other
 (expense)         2             (14)           (2) 16           43            37           (5) 6                  (95.3%)                166.7%
 income
 Income tax       (258)         36             (3) (294)        (332)         32           (6) (364)              (22.3%)                (19.2%)
 expense
NET INCOME     $ 396           (71)               467          567           15               552                (30.2%)                (15.4%)
BASIC EARNINGS  $ 0.69          (0.12)             0.82         0.93          0.02             0.90               (25.8%)                (8.9%)
PER SHARE
DILUTED
EARNINGS PER     $ 0.69          (0.12)             0.82         0.92          0.02             0.90               (25.0%)                (8.9%)
SHARE
AVERAGE SHARES
OUTSTANDING
 Basic           571,225                          571,225      611,862                        611,862            (6.6%)                 (6.6%)
 Diluted         572,244                          572,244      613,338                        613,338            (6.7%)                 (6.7%)
DIVIDENDS PER    $ 1.08                             1.08         1.08                           1.08               0.0%                   0.0%
COMMON SHARE

SPECIAL ITEMS
          Includes severance costs associated with recent headcount reductions
          ($52 million), integration and retention costs associated with our
(1) -   acquisition of Qwest ($25 million) and the impairment of two office
          buildings ($18 million), less the offsetting impact of a litigation
          settlement in the amount of $2 million.
(2) -   Impairment of a non-operating investment
          ($14 million).
(3) -   Income tax benefit of Item
          (1).
          Includes severance costs associated with reduction in force
          initiatives ($11 million), integration, severance and retention
(4) -   costs associated with our acquisition of Qwest ($18 million),
          integration, severance, and retention costs associated with our
          acquisition of Savvis ($7 million) and an accounting adjustment ($18
          million).
(5) -   Gain on the sale of a non-operating investment ($32 million) and
          settlements of other non-operating issues ($5 million).
(6) -   Income tax expense of Items (4) and (5) and a favorable federal
          income tax settlement ($33 million).

* During 2013, we reallocated the discounts on our bundled services (local,
long distance, and broadband) to the component products and services. The net
effect of the bundled services reallocation was a reclassification of certain
revenues from legacy services to strategic services. Also in 2013, we
reallocated our CLEC revenues into their component products and services. The
net effect of this CLEC reallocation was a reclassification of certain
revenues from strategic services to legacy services. The 2013 information
presented here has been restated to reflect these reclassifications.



    CenturyLink, Inc.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    JUNE 30, 2014 AND DECEMBER 31, 2013
    (UNAUDITED)
    (Dollars in millions)
                                             June 30,  December 31,
                                             2014      2013
    ASSETS
CURRENT ASSETS
    Cash and cash equivalents              $ 181       168
    Other current assets                     3,417     3,739
     Total current assets                  3,598     3,907
NET PROPERTY, PLANT AND EQUIPMENT
    Property, plant and equipment            35,404    34,307
    Accumulated depreciation                 (16,969)  (15,661)
     Net property, plant and equipment     18,435    18,646
GOODWILL AND OTHER ASSETS
    Goodwill                                 20,674    20,674
    Other, net                               7,907     8,560
     Total goodwill and other assets      28,581    29,234
TOTAL ASSETS                               $ 50,614    51,787
    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Current maturities of long-term debt   $ 1,188     785
    Other current liabilities                3,255     3,624
     Total current liabilities            4,443     4,409
LONG-TERM DEBT                               19,771    20,181
DEFERRED CREDITS AND OTHER LIABILITIES       9,802     10,006
STOCKHOLDERS' EQUITY                         16,598    17,191
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 50,614    51,787



CenturyLink, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED)
(Dollars in millions)
                                                        Six Months  Six Months
                                                        ended     ended
                                                        June 30,   June 30,
                                                        2014       2013
OPERATING ACTIVITIES
 Net income                                         $ 396         567
 Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization                    2,200       2,240
     Impairment of assets                             32          -
     Deferred income taxes                            208         307
     Provision for uncollectible accounts             63          65
     Gain on sale of intangible assets                -           (32)
     Changes in current assets and current             (364)       (99)
     liabilities, net
     Retirement benefits                              (102)       (220)
     Changes in other noncurrent assets and            66          48
     liabilities
     Other, net                                       10          (20)
                    Net cash provided by operating     2,509       2,856
                    activities
INVESTING ACTIVITIES
 Payments for property, plant and equipment and        (1,401)     (1,410)
 capitalized software
 Proceeds from sale of intangible assets or            -           75
 property
 Other, net                                           (18)        23
                    Net cash used in investing         (1,419)     (1,312)
                    activities
FINANCING ACTIVITIES
 Net proceeds from issuance of long-term debt         -           1,740
 Payments of long-term debt                           (121)       (1,018)
 Net borrowings (payments) on credit facility         120         (775)
 Dividends paid                                       (616)       (661)
 Net proceeds from issuance of common stock           32          40
 Repurchases of common stock                          (493)       (867)
 Other, net                                           1           -
                    Net cash used in financing         (1,077)     (1,541)
                    activities
Net increase in cash and cash equivalents             13          3
Cash and cash equivalents at beginning of period      168         211
Cash and cash equivalents at end of period          $ 181         214





CenturyLink, Inc.
SELECTED SEGMENT FINANCIAL INFORMATION
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED)
(Dollars in millions)
                                                        

                                Three months ended       Six months ended June
                                June 30, *               30, *
                                2014        2013**       2014        2013**
Total segment revenues        $ 4,288       4,276      $ 8,572       8,532
Total segment expenses          2,118       2,041        4,217       3,969
Total segment income          $ 2,170       2,235      $ 4,355       4,563
Total segment income margin
(segment income                 50.6%       52.3%        50.8%       53.5%
 divided by segment
revenues)
Consumer
Revenues
    Strategic services        $ 709         653        $ 1,411       1,298
    Legacy services             790         840          1,596       1,704
    Data integration            1           1            2           3
                              $ 1,500       1,494      $ 3,009       3,005
Expenses
    Direct                    $ 478         458        $ 944         894
    Allocated                   121         116          238         229
                              $ 599         574        $ 1,182       1,123
Segment income                $ 901         920        $ 1,827       1,882
Segment income margin           60.1%       61.6%        60.7%       62.6%
Business
Revenues
    Strategic services        $ 663         615        $ 1,318       1,229
    Legacy services             715         744          1,446       1,497
    Data integration            186         166          359         304
                              $ 1,564       1,525      $ 3,123       3,030
Expenses
    Direct                    $ 866         804        $ 1,720       1,557
    Allocated                   106         108          218         212
                              $ 972         912        $ 1,938       1,769
Segment income                $ 592         613        $ 1,185       1,261
Segment income margin           37.9%       40.2%        37.9%       41.6%
Wholesale
Revenues
    Strategic services        $ 568         571        $ 1,138       1,142
    Legacy services             298         339          590         674
                              $ 866         910        $ 1,728       1,816
Expenses
    Direct                    $ 46          50         $ 87          80
    Allocated                   237         251          472         495
                              $ 283         301        $ 559         575
Segment income                $ 583         609        $ 1,169       1,241
Segment income margin           67.3%       66.9%        67.7%       68.3%
Hosting
Revenues
    Strategic services        $ 358         347        $ 712         681
                              $ 358         347        $ 712         681
Expenses
    Direct                    $ 226         215        $ 464         424
    Allocated                   38          39           74          78
                              $ 264         254        $ 538         502
Segment income                $ 94          93         $ 174         179
Segment income margin           26.3%       26.8%        24.4%       26.3%

   During the first quarter of 2014, we adopted several changes with respect
   to the assignment of certain expenses to our segments. We have restated
*  the previously reported segment results for the three and six months ended
   June 30, 2013 to conform to the current presentation. The nature of the
   most significant changes and the related effect on segment expenses for the
   three and six months ended June 30, 2013 are as follows:
        The method for allocating certain shared costs of consumer sales and
        care, including bad debt expense and credit card fees, was revised,
   -    which resulted in an increase in consumer segment expenses of $22
        million and $42 million with a corresponding decrease in business
        segment expenses for the three and six months ended June 30, 2013,
        respectively; and
        Hosting segment expenses have been conformed to the reporting of our
        other segments' expenses. Specifically, our integration efforts and
        centralization of certain administrative functions reached the point
   -    where it has become more practical to discontinue including certain
        finance, information technology, legal and human resources expenses in
        the hosting segment, which resulted in a decrease of $21 million and
        $39 million in hosting segment expenses for the three and six months
        ended June 30, 2013, respectively.
        During 2013, we reallocated the discounts on our bundled services
        (local, long distance, and broadband) to the component products and
        services. The net effect of the bundled services reallocation was a
        reclassification of certain revenues from legacy services to strategic
**      services. Also in 2013, we reallocated our CLEC revenues into their
        component products and services. The net effect of this CLEC
        reallocation was a reclassification of certain revenues from strategic
        services to legacy services. The 2013 information presented here has
        been restated to reflect these reclassifications.
   See our SEC reports for further information.



CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)
               Three months ended June 30, 2014     Three months ended June 30, 2013
                                         As                                    As
                                         adjusted                              adjusted
                           Less        excluding              Less        excluding
               As        special     special    As        special     special
               reported  items       items      reported  items       items
Operating
cash flow and
cash flow
margin
 Operating  $ 655         (65)      (1) 720          715         (20)      (2) 735
 income
 Add:
 Depreciation  1,093       -             1,093        1,123       -             1,123
 and
 amortization
 Operating  $ 1,748       (65)          1,813        1,838       (20)          1,858
 cash flow
 Revenues $ 4,541       -             4,541        4,525       -             4,525
 Operating
 income margin
 (operating    14.4%                     15.9%        15.8%                     16.2%
 income
 divided by
 revenues)
 Operating
 cash flow
 margin
 (operating    38.5%                     39.9%        40.6%                     41.1%
 cash flow
 divided by
 revenues)
Free cash
flow
 Operating                          $   1,813                                  1,858
 cash flow
 Less: Cash
 paid for
 income taxes,                           (13)                                   (38)
 net of
 refunds
 Less: Cash
 paid for
 interest, net                           (407)                                  (382)
 of amounts
 capitalized
 Less:
 Capital                                 (723)                                  (739)
 expenditures
 (3)
 Add: Other                            7                                      4
 income
 Free cash                          $   677                                    703
 flow (4)

SPECIAL ITEMS
        Includes severance costs associated with recent headcount reductions
(1) - ($33 million), integration and retention costs associated with our
        acquisition of Qwest ($14 million) and the impairment of two office
        buildings ($18 million).
        Includes severance costs associated with reduction in force
        initiatives ($4 million), integration, severance and retention costs
(2) - associated with our acquisition of Qwest ($11 million), integration,
        severance, and retention costs associated with our acquisition of
        Savvis ($4 million) and an accounting adjustment ($1 million).
        Excludes $8 million in second quarter 2014 and $8 million in second
(3) - quarter 2013 of capital expenditures related to the integration of
        Embarq, Qwest and Savvis.
(4) - Excludes special items identified in items (1) and (2).





CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)
               Six months ended June 30, 2014       Six months ended June 30, 2013
                                         As                                    As
                                         adjusted                              adjusted
                           Less        excluding              Less        excluding
               As        special     special    As        special     special
               reported  items       items      reported  items       items
Operating
cash flow and
cash flow
margin
 Operating  $ 1,308       (93)      (1) 1,401        1,497       (54)      (2) 1,551
 income
 Add:
 Depreciation  2,200       -             2,200        2,240       -             2,240
 and
 amortization
 Operating  $ 3,508       (93)          3,601        3,737       (54)          3,791
 cash flow
 Revenues $ 9,079       -             9,079        9,038       -             9,038
 Operating
 income margin
 (operating    14.4%                     15.4%        16.6%                     17.2%
 income
 divided by
 revenues)
 Operating
 cash flow
 margin
 (operating    38.6%                     39.7%        41.3%                     41.9%
 cash flow
 divided by
 revenues)
Free cash
flow
 Operating                          $   3,601                                  3,791
 cash flow
 Less: Cash
 paid for
 income taxes,                           (23)                                   (46)
 net of
 refunds
 Less: Cash
 paid for
 interest, net                           (672)                                  (647)
 of amounts
 capitalized
 Less:
 Capital                                 (1,385)                                (1,395)
 expenditures
 (3)
 Add: Other                            16                                     6
 income
 Free cash                          $   1,537                                  1,709
 flow (4)

SPECIAL ITEMS
            Includes severance costs associated with recent headcount
            reductions ($52 million), integration and retention costs
(1) -     associated with our acquisition of Qwest ($25 million) and the
            impairment of two office buildings ($18 million), less the
            offsetting impact of a litigation settlement in the amount of $2
            million.
            Includes severance costs associated with reduction in force
            initiatives ($11 million), integration, severance and retention
(2) -     costs associated with our acquisition of Qwest ($18 million),
            integration, severance, and retention costs associated with our
            acquisition of Savvis ($7 million) and an accounting adjustment
            ($18 million).
            Excludes $16 million in second quarter 2014 and $15 million in
(3) -     second quarter 2013 of capital expenditures related to the
            integration of Embarq, Qwest and Savvis.
(4) -     Excludes special items identified in items (1) and
            (2).



                       CenturyLink, Inc.
                       OPERATING METRICS
                       (UNAUDITED)
                       (In thousands)
                       As of                As of           As of
                       June 30, 2014        March 31, 2014  June 30, 2013
Broadband subscribers  6,055                6,057           5,909
Access lines           12,707               12,882          13,331



CenturyLink, Inc.
SUPPLEMENTAL NON-GAAP INFORMATION - ADJUSTED DILUTED EPS
THREE MONTHS ENDED JUNE 30, 2014 AND 2013 AND SIX MONTHS ENDED JUNE 30, 2014
AND 2013
(UNAUDITED)
(Dollars in millions, except per share amounts)
                                Three months ended      Six months ended
                                June 30,    June 30,    June 30,    June 30,
                                2014        2013        2014        2013
                                (excluding  (excluding  (excluding  (excluding
                                special     special     special     special
                                items)      items)      items)      items)
Net income *                  $ 247         249         467         552
Add back:
 Amortization of customer
base intangibles:
         Qwest                  216         230         435         464
         Embarq                 30          34          59          68
         Savvis                 16          15          31          30
 Amortization of trademark
intangibles:
         Qwest                  5           11          11          23
         Savvis                 -           2           5           4
 Amortization of fair value
adjustment of long-term debt:
         Embarq                 2           1           3           2
         Qwest                  (12)        (17)        (24)        (34)
 Subtotal                257         276         520         557
 Tax effect of above items   (96)        (108)       (198)       (217)
Net adjustment, after taxes     161         168         322         340
Net income, as adjusted for   $ 408         417         789         892
above items
Weighted average diluted        569.0       605.6       572.2       613.3
shares outstanding
Diluted EPS (excluding        $ 0.43        0.41        0.82        0.90
special items)
Adjusted diluted EPS as
adjusted for the above-listed
purchaseaccounting
intangible and interest
amortizations
 (excluding special items)  $ 0.72        0.69        1.38        1.46

The above schedule presents adjusted net income and adjusted diluted earnings
per share (both excluding special items) by adding back to net income and
diluted earnings per share certain non-cash expense items that arise as a
result of the application of business combination accounting rules to our
recent acquisitions. Such presentation is not in accordance with generally
accepted accounting principles but management believes the presentation is
useful to analysts and investors to understand the impacts of growing our
business through acquisitions.
*See preceding schedules for a summary description of special items.



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SOURCE CenturyLink, Inc.

Website: http://www.centurylink.com
Contact: Kristina Waugh, 318.340.5627, kristina.r.waugh@centurylink.com
 
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